Copper hit its highest point since March overnight, buoyed by the prospect of higher demand from top consumer China after data showed a strong performance in its services sector.
China’s services sector returned to growth last month for the first time since January as the economy recovers from strict coronavirus containment measures, a private survey showed.
Prices for copper, which are up about 26 per cent from March lows, have been supported by higher consumption from China’s infrastructure and construction sectors and hopes for a global economic recovery as nations reopen their economies.
“Chinese copper demand has been very solid over the past two months,” said BMO Capital Markets analyst Tim Wood-Dow.
“Chinese growth will be infrastructure-led this year, and this is very positive for metals. My feeling is that investors are gradually becoming more confident in China’s recovery.”
Benchmark copper on the London Metal Exchange (LME) eased 0.2 per cent to $US5,518 a tonne by 1645 GMT after touching its highest since March 13 at $US5,549.50.
China’s central bank vice-governor said the economic hit from the coronavirus pandemic was bigger than expected and that more monetary and credit policy support was needed.
Private payrolls in the United States fell less than expected in May, with employers laying off another 2.76 million workers.
Codelco, the world’s largest copper producer, BHP and Antofagasta told Reuters a magnitude 6.8 earthquake in northern Chile caused no damage or operational problems at their sites.
The US State Department hopes to expand a strategic minerals initiative aimed at ensuring supply chains for metals critical for batteries and wind and solar power as demand for green energy continues to grow, a top diplomat said.
LME aluminium rose 1.1 per cent to $US1,563.50 a tonne, zinc was steady at $US2,019, lead was mostly unchanged at $US1,718, tin edged down 0.1 per cent to $US15,991 and nickel added 0.3 per cent to $US12,885 after touching its highest point since March 10.